Italian White Certificates: Which Way for Growth?

Transcript

1 12th IAEE European Energy Conference Energy challenge and environmental sustainability Italian White Certificates: Which Way for Growth? Session: Citizen and market instruments for efficiency Ing. Alberto Pincherle, AIEE-Giovani, President Venice, 12th September 2012 Associazione Italiana Economisti dell Energia -AIEE- Sezione Giovani

2 Alberto Pincherle - AIEE-G 2 Overview Energy Efficiency (EE) has been a dominant theme in EU policy in these last years, as a consequence of the EU Climate-Energy Package ( ). In Italy, EE promotion dates back at least at 1990, when Law 10 prescribed that big energy consumers nominate an expert, the Energy Manager (EM), to seek for an increased EE in their context (Industry, Service Sector, Public Sector). Since 2001 a specific national mechanism, the White Certificates (Wh. C.) has been set up in Italy and is fully operative since 2005 delivering since good results.

3 Alberto Pincherle - AIEE-G 3 The Italian White Certificates mechanism: semplified scheme Gas and electric Distributors (with over than end customers) Obligated Gas and electric Distributors (with over than end customers) Obligated Gas and electric Distributors (with less end customers) Voluntary Gestore dei Mercati Energetici (GME) STOCK EXCHANGE Italian Regulator (Autorità per l energia elettrica ed il gas, AEEG) Energy Saving Companies (ESCos) Voluntary Energy Managers (EM) Voluntary 6,1 /family in 2012 Consumers (trough gas and electricity bills) Direct Wh.C. sale (Over the Counter) Indirect Wh.C. sale (Stock Market) Handover of Wh.C. to AEEG

4 Wh. C. are the least expensive incentive for EE for the Italian State Measure indicated by NEEAP 2007 Category Results Total investment cost-efficacy Cost-efficacacy for the State Directive 2002/91/CE on buildings and new minimum EE building standards. Tax deductions (-55%) for works on buildings (public and private) allowing higher final EE White Certificates (GWh) (%) ( euro/kwh) ( euro/kwh) Law (binding) ,8% 0,13 not applicabile Fiscal incentives ,4% 0,10 0,05 Tradable titles, binding obligation for gas and electricity distributors ,0% Not available 0,0012 Tax deductions (-20%) for installation of inverters Fiscal incentives 137 0,2% 0,01 0,002 on electrical motors and replacement of electrical motors with higher EE ones. Financial incentives for car and small trucks (up Fiscal incentives ,5% 0,82 0,1 to 3,5 tons) replacement with high EE vehicles TOTAL % NEEAP: National Energy Efficiency Action Plan Alberto Pincherle - AIEE-G 4

5 Alberto Pincherle - AIEE-G 5 Distributors obligations in primary energy (Mtoe/year)

6 Alberto Pincherle - AIEE-G 6 Preliminary question From a general energy policy perspective: Are incentives for Energy Efficiency expensive as an absolute value? Is it better to invest public money in Photovoltaic Plants (PV) as it has been massively happening in Italy in these last few years?

7 Source: Alberto Pincherle - AIEE-G 7 ITALY: PV MegaWatthours or Wh.C. NegaWatthours incentives? Incentives for PV MegaWatthours Incentives for Wh.C. NegaWatthours if all objectives set for the year 2012 were to be met (6 millions toe of primary energy saved corresponding to correspond to GWh ); Wh.C. are reimbursed at 86,98 /toe in 2012 Element Time length of yearly production (2012) Production capacity (Power installed, 2012) Energy Produced (2012) Public economic incentives (to date shown) Cost for photovoltaic energy production (to date shown) Quantity (July 14, 2012) Unit Hours kw kw-hours ,33 cents/kwh million in total in ,63 cent/kwh of EE (NegaWatthour) for Consumers Unit energy cost per PV subsidized plants in Italy in mid-2012

8 Alberto Pincherle - AIEE-G 8 The cost of electricity for domestic consumers (*) Condizioni economiche per i clienti del Servizio di maggior tutela Valori al netto delle imposte dal 1 luglio 2012 CLIENTI DOMESTICI - Servizi di vendita: energia e dispacciamento (PED), commercializzazione vendita (PCV), componenti di perequazione (PPE) e di dispacciamento (DISPbt) - Servizi di rete: distribuzione trasporto e misura (τ1, τ2, τ3) - Oneri generali: componenti A (A2, A3, A4, A5, As), UC (UC3, UC4, UC6, UC7) e MCT A) Abitazione di residenza anagrafica con potenza impegnata fino a 3 kw Servizi di vendita Servizi Oneri TOTALE Monorario Biorario di rete generali Monorario Biorario kwh Quota energia ( /kwh) fascia unica fascia F1 fascia F23 fascia unica fascia unica fascia unica fascia F1 fascia F23 kwh/anno: da 0 a , , , , , , , , ,193 da 1801 a , , , , , , , , ,3886 da 2641 a , , , , , , , , ,32019 da , , , , , , , , Quota fissa ( /anno) 16, , , ,9018 Quota potenza ( /kw/anno) 5, , , , /kwh Obviously this is not comparable as it is a full energy cost and not an incentive, but it gives the idea of the different economic values involved. 15,2 cents/kwhours (*) Those that are served by the Public Company Acquirente Unico and have not decided to seek an energy vendor since liberalization.

9 Alberto Pincherle - AIEE-G 9 Italian Wh. Certificates: current situation The mechanism of Wh. C. in Italy encompasses at least two basilar questions: 1. Will the mechanism will deliver the quantitative growth needed in the future ( objectives)? 2. Will the mechanism deliver the qualitative actions needed? In other words, will Wh. C. bring innovation? Will EE be stimulated in the right sectors? In the best technologies?

10 Alberto Pincherle - AIEE-G Quantitative growth: the target Are Italian Wh. C. bringing the quantitative growth needed? THE NEEAP TARGET Target from NEEAP % attained by Wh.C. at a very low cost Energy Efficiency in Italy (GWh/year) (achieved) 2016 (target) 2020 (target) EE levels achieved Italy in 2010 and EU objectives for Italy 2016 and EE annual growth rate has to be equal to 13.3%.

11 1. Quantitative growth: the actual results The Wh. C. mechanism is now giving unsufficient results,: there s a need to revitalize it! toe Wh.C. Type I emitted TEE Wh.C. Type II emitted TEE Wh.C. Type III emitted TEE Obligation Gap is increasing year Ratio 184% 239% 143% 90% 89% 70% Wh.C. emitted/obligations Total Wh.C. emitted in different years and their subdivision in different Types compared to total obligations. At the bottom the ratio between the Wh.C. emitted and the total obligations. AEEG, Annual Reports from 2005 to Alberto Pincherle - AIEE-G 11

12 1. Quantitative growth: consequence of the actual results The Wh. C. mechanism is now giving unsufficient results,: there s a need to revitalize it! Prices are getting higher than reimbursement and Wh.C. quantities are increasing: big economic problem for the Distributors (cannot recover it as are subject to Distribution tarif and not a free price) Prices for the different kinds of Italian Wh.C. in the G.M.E. market, their trend extrapolated with linear equations (Types III and Type V) and polynomial equation (Type II) together with their reimbursement value for obligated distributors. Alberto Pincherle - AIEE-G 12

13 Alberto Pincherle - AIEE-G Qualitative results: the Wh.C. beneficiary sectors Transports, even if they contribute to the mechanism to a lower extent (only for electric vehicles i.e. train, subway, tramway, trolleybusses- and gas vehicles) do not receive any incentive even if they are eligibile for Wh.C. Moreover transports are not subject to other relevant incentive for EE. National Energy Balance 2010 Wh.C % 80% 78,0% 70% 60% 50% 40% 30% 20% 29,2% 22,0% 33,1% 35,5% 10% 0% Industry (including non energetical consumption) 0,0% Transports (includes bunker) Civil sector 2,2% 0,0% Agriculture EE obtained ad a results of the Wh.C. mechanism compared to total primary energy consumption per sector in 2010.

14 Alberto Pincherle - AIEE-G Qualitative results: the EE potential and the need for Wh.C. There is a need to promote Wh. C. in some sectors, as in Transports and Agriculture. Sector Reduction of final energy consumption in 2016 Reduction of final energy consumption in 2020 CO 2 avoided emissions in 2020 GWh/year Mtep/year GWh/year % Mtep/year Mton Residential ,8% Service Sector ,1% Industry ,5% Transports ,6% Total ,0% Reductions of final energy consumptions expected for 2016 and 2020 (NEEAP 2011)

15 Alberto Pincherle - AIEE-G 15 SITUATION Wh.C. are an economic way to promote EE Presently, Wh.C. give the highest contribution (44%) to EE in Italy Wh.C. mechanism is slowing down EE needs to increase very much in Italy ( ) Some sectors (Transports, Agriculture) are left behind!!!!!!

16 Eight possible ways for growth: 1-3 ACTION DESCRIPTION APPLICABILITY POTENTIAL 1.Energy Sellers (Vendors), as in France and Great Britain. Transfer obligations from Distributors to Sellers; Eliminate reimbursement; Push Sellers to change business model from pure energy sale to energy service sale; extend obligations also to oil derivatives for heathing and transport; Already ruled by Legislative Decree 115/2008 but never applied Auctions. Award Wh.C. through specific auctions: the best project selected on a cost/efficiency basis would be awarded Wh.C.. Make possible very EE large projects with the advantage of reaching critical mass to change market situation (e.g. hybrid busses, public illumination LED lights or to develop large infrastrucural projects (subways) by knowing in advance the economic incentive awarded. project are thus bankable more easily Tenders for public buildings and services. Similar to the previous point but: only for public sector; financed through emission of special financial Wh.C. ; money should be reimbursed after 3 years; emission of financial Wh.C. would stabilize Wh. C. price. Alberto Pincherle - AIEE-G 16

17 Alberto Pincherle - AIEE-G 17 Eight possible ways for growth: 4-5 ACTION DESCRIPTION APPLICABILITY POTENTIAL 4. Transports: Mobility Managers. Recognize Mobility Managers as a professional figure that can directly ask Wh.C Industrial and Service Companies: Energy Managers. Give additional Wh.C. to: o companies certified EN ISO (Energy Management Service) as they give major guarantees of mantaining savings in the following years; o ESCOs certified UNI CEI 11352:2010 (norm certifying qualitatives aspects of ESCOs). Finance through Wh.C. a certain number of : o Audits in private houses (Home Energy Advice Packages) with the collection of data to make a statistical database; o Audits for SME, Public Sector with the collection of data for a statistical database

18 Alberto Pincherle - AIEE-G 18 Eight possible ways for growth: 6-7 ACTION DESCRIPTION APPLICABILITY POTENTIAL 6. A new Governance to increase the number of forms. 7. Local Energy Agencies as massaggregators. Two possible solutions: 1. a public-private discussion forum on new forms. In this situation, anyone could propose to AEEG new forms and they should be publicly discussed and approved within 30 days. It is very similar to publicprivate French Association ATEE; 2. crowd sourcing to collect ideas, data and produce new forms. This would help a lot e.g. in retrieving data to build baselines. Overcome easierly the minimum amount of EE that is needed before asking the emission of Wh.C. Making training on how to ask Wh.C

19 Alberto Pincherle - AIEE-G 19 Eight possible ways for growth: 8 ACTION DESCRIPTION APPLICABILITY POTENTIAL 8. Toward an Italo- French Common Scheme? The two schemes have a lot in common and both use a tradable certificates scheme. An initial integration could consist in making common forms to promote some specific promising sectors (LED lamps, Hybrid bsses, electric car sharing, heat-recovery ventilation systems for houses ) that encompass also an industrial potential for both countries: critical masses could be reached easyer and market transformation could happen in those sectors

20 Alberto Pincherle - AIEE-G 20 Thank you for the attention! albertopincherle@gmail.com

21 Alberto Pincherle - AIEE-G 21 Annexes

22 Source: Alberto Pincherle - AIEE-G 22 ITALY: PV growth 08 September July Millions in 2 months

23 ITALY: PV MegaWatthours or Wh.C. NegaWatthours incentives? Descrizione del processo di Figura 1 Gli attori che possono operare direttamente nella produzione di titoli sono i soggetti obbligati (distributori con più di clienti finali, che si vedono assegnato annualmente un obiettivo di risparmio energetico da conseguire) e i soggetti volontari [distributori con meno di clienti, società di servizi energetici (SSE), soggetti con energymanager (SEM)]. Tali soggetti si interfacciano con l universo dei consumatori finali di energia, individuano ed attuano misure di miglioramento dell efficienza, ottenendo in ritorno i corrispondenti risparmi energetici, per il riconoscimento dei quali inviano una proposta all AEEG. ENEA effettua l istruttoria sulle proposte. Se l esito è positivo, il GME riconosce i titoli di efficienza energetica ai soggetti proponenti. Se il soggetto obbligato ha ottenuto per tale via TEE, può iniziare a soddisfare il proprio obiettivo assegnato. Altri titoli possono essere reperiti sulla borsa gestita dal GME, su cui i soggetti volontari hanno venduto i propri titoli. Altri titoli possono essere ottenuti dai soggetti obbligati tramite contrattazione bilaterale coi soggetti volontari in possesso di TEE. Se l obiettivo annuale non è raggiunto, il soggetto obbligato viene sanzionato. Se l obiettivo è raggiunto, viene concesso il recupero in tariffa per l ammontare di titoli costituente l obbligo. Source: ENEA, Guida Operativa, 2 Edizione Alberto Pincherle - AIEE-G 23

24 WEB SITES OF INTEREST Ente Italian Regulator, Autorità per l energia elettrica ed il gas Italian Regulator, EE webpages, Autorità per l energia elettrica ed il gas Efficienza energetica Indirizzo Gestore dei servizi energetici (GSE) Gestore dei servizi energetici (GSE) - Conto energia fotovoltaico Stock Market, Gestore dei mercati energetici (GME) Gestore dei mercati energetici (GME) Titoli di Efficienza Energetica (Certificati Bianchi) Gestore dei mercati energetici (GME) Certificati Verdi px Italian Energy Efficiency Agency,Enea Efficienza Energetica Alberto G. Pincherle, AIEE-G